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China's COVID-19 surge hits Beijing trading floors, Shanghai finance hub

China's COVID-19 surge hits Beijing trading floors, Shanghai finance hub

FILE PHOTO: People walk by office towers in the Lujiazui financial district of Shanghai, China Oct 17, 2022. REUTERS/Aly Song/File Photo

SHANGHAI: COVID-19 is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai, with illness and absence thinning already light trade and forcing regulators to cancel a weekly meeting vetting public share sales.

Many banks and asset managers have dusted off plans devised to cope with previous COVID-19 crises, injecting another layer of unpredictability into currency and stock markets, where the outlook is clouded by a rocky exit from strict health curbs.

With mass testing halted after abruptly dropping its zero-COVID policy earlier this month, official data no longer reliably capture new case numbers. Internal surveys by several big asset managers and banks suggest more than half of their employees in Beijing, the epicentre of the virus surge, have tested positive.

"I would say more than half of colleagues in Beijing are sick, compared with 5 per cent to 10 per cent in Shanghai," said a fund manager at PICC Asset Management, declining to be named as he's not authorised to speak to the media.

In China's interbank market, the average daily yuan/dollar trading volume fell to about US$20 billion last week, the lowest level since April 2022, when Shanghai was put under a painful two-month lockdown to prevent the spread of the virus.

Stock trading volume also eased last week. The weekly total of 139 billion shares traded for the Shanghai Composite was a bit lower than the average for the past three years of about 143 billion.

Most currency traders in Beijing are absent from offices, so "trading volume would naturally fall", said a trader at a state-owned lender, speaking on condition of anonymity because they are not authorised to discuss such matters with the media.

The bank has asked any employee who lives with people with fever or has tested positive not to come to the office. "Remote trading doesn't solve the problem that you're sick in bed, and you also have your family to take care of," the trader said.


The pandemic also has an impact on initial public offerings (IPOs), with the China Securities Regulatory Commission calling off a weekly meeting vetting them last week. It is not clear if the meeting will be revived this week.

The National Bureau of Statistics also cancelled a news conference scheduled for November's economic data.

To be sure, years of strict COVID-19 rules have left a lot of businesses well-placed to handle disruption.

"We travel a lot, and we have several people on one IPO project, so we take turns doing the job if one banker is on sick leave," said one banker at Shanghai-based Haitong Securities, speaking on condition of anonymity.

Still, the situation ahead is without much precedent as the virus begins to spread far and wide.

"We have a backup and recovery disaster plan and revived backup offices in two locations just like how we did during the Shanghai lockdown in April and May," said a senior trader at a Chinese bank in Shanghai.

"We are doing everything we can, as this wave of infections and the situation should be the worst since the first half of 2020."

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Source: Reuters/gs


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